Clothing Stores

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 35,900 clothing retailers in the US generate revenue by selling a variety of apparel and apparel-related products to consumers. Clothing stores sell primarily new clothing, and may specialize in a particular category, such as men, women, children, infants, families, or accessories. Family clothing stores account for 59% of industry sales. Women’s clothing stores are 19%; other specialty stores are 9%, and men’s clothing stores are 3%.

Seasonality of Demand

Most clothing stores experience major seasonal fluctuations during the winter holiday and back-to-school periods.

Trends and Fads Rapidly Change

The clothing industry is in a constant state of change, driven by fashion trends and fads.

Industry size & Structure

The average clothing retailer employs around 20 workers and generates $3.9 million annually.

    • The clothing retail industry consists of about 35,900 companies that employ 706,000 workers and generate about $139 billion annually.
    • Family clothing stores account for 59% of industry sales. Women's clothing stores are 19%; other specialty stores are 9%, and men's clothing stores are 3%.
    • The industry is concentrated at the top, and highly fragmented at the bottom. The top 20 firms account for 55% of industry sales.
    • The average independent clothing retailer operates out of a single location, employs fewer than 10 workers, and generates between $300,000 and $900,000 annually.
    • The industry includes national chains, regional chains, and independent retailers. Some large apparel manufacturers have retail operations.
    • Large companies include TJX Companies (TJ Maxx, Marshalls), The Gap, Nordstrom, Limited Brands, and Ross.
                              Industry Forecast
                              Clothing Stores Industry Growth
                              Source: Vertical IQ and Inforum

                              Coronavirus Update

                              May 17, 2022 - China’s Zero-COVID Policy Slows Factory Output, Exports
                              • Apparel retailers that rely on suppliers in China may be experiencing increased supply chain disruptions. China’s manufacturing output decreased to a 26-month low in April as its zero-tolerance approach to the pandemic slowed factory output. The Caixin China General Manufacturing purchasing managers’ index (PMI) dropped from 48.4 in March 2022 to 46 in April. A reading below 50 suggests output is contracting rather than expanding. In April, new orders and production fell to their lowest levels since the survey began in 2004, and exports declined at the steepest rate in nearly two years. Delivery times grew at the second-fastest rate in the index’s history amid travel restrictions and raw materials shortages.
                              • About 4.5 million workers quit their jobs in March 2022, according to the US Bureau of Labor Statistics. In 2021, more than 47 million people voluntarily left their jobs in what is being termed “The Great Resignation.” March’s quit figures marked the ninth consecutive month when job openings outnumbered the number of unemployed persons. Industry sectors with high quit rates (the number of quits as a percentage of total industry employment) included leisure & hospitality (quit rate of 5.7), retail (4.5), and professional and business services (3.7). As of March 2022, there were 0.5 unemployed persons for every US job opening. In April 2020, there were 4.9 unemployed persons for every job opening.
                              • Some retailers are changing their merchandising strategies as consumers tighten their belts amid rising inflation. Macy’s has announced that starting this spring it will dedicate more store space to its “Backstage” store-within-a-store concept, where it will offer more bargain deals. The Backstage area will feature lower-priced goods, including apparel, beauty products, housewares, and pre-packaged food. Industry-watchers noted the pivot due to Macy’s traditional market position as appealing to an affluent clientele. Macy’s Backstage is being rolled out to additional locations nationwide, including downtown stores in key locations such as New York City and Chicago.
                              • With new COVID-19 cases down significantly from the peaks of the Omicron wave, many employers were hopeful that more of their white-collar workers would return to the office. However, the return to offices has been slow. During the first week of December 2021, average workplace occupancy was about 40% in the ten cities monitored by security firm Kastle Systems. By May 11, 2022, average workplace occupancy was 43.4%. Hybrid working models are expected to be the new norm, with long-lasting impacts on office occupancy. “It’s hard to imagine, when you look at office workers who can do their jobs remotely, that those numbers are going to get above 60% to 65% nationwide,” said Brian Kropp, chief of human-resources research for advisory and research firm Gartner.
                              • Retail sales for clothing and clothing accessories stores increased 0.7% in value month over month on an adjusted basis and rose 11.1% in value year over year on an unadjusted basis in April 2022.
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